Widgets are an excellent way of building links but sometimes Google gives penalties to the most “successful” websites.
Former SEOmoz employee Matt Inman was able to build 500,000 links using widgets but because his methods were outside the acceptable widget link guidelines his sites were given penalties.
Most people seem to think there is some ambiguity about how Google handles widget links but really there isn’t. Matt Cutts has made it quite clear that some links are OK and others aren’t.
In this post about getting value from scrapers by adding links to the footer of your RSS feed Matt said it was OK as long as the anchor text wasn’t spammy. Basically that means that adding a link to your blog saying “Post from Blogstorm” is acceptable while adding a link saying “Post from Blogstorm search engine optimisation blog” might be deemed to be going overboard. My guess is that in most industries Google won’t be too concerned about this but if you have a blog about payday loans then Google might take action.
The same principle applies to widgets. If you use the name of your site or the name of your widget as the link then it’s not a problem. Really the link should go to the homepage of the widget rather than the homepage of the site. As soon as you start using keyword rich anchor text and linking to your homepage it’s not really surprising that Google gets upset.
I don’t understand why people are getting confused by this? Google wants to rank the most useful sites at the top of their results. They don’t want to rank the site that has the most popular widgets. If you are going to make the effort to use widget bait or any other type of linkbait at least take the time to make it defensible.